Outfox the Market hikes direct debits by up to 40%

Small supplier Outfox the Market is changing how it takes monthly direct debit payments, meaning some customers face paying 40% more during winter months – on top of hiking prices for the third time in five months.

Update Tuesday 27 November: Outfox the Market has also apologised for originally sending incorrect information to some customers – saying it incorrectly added an extra 25% to their estimated annual costs. This doesn't change its new direct debit policy – everything below still applies.

From next month Outfox the Market customers will be charged more in winter than in summer, with their monthly direct debits adjusted accordingly. On average, a typical user could see 40% higher payments between October and March, and 40% lower payments between April and September than they currently pay.

This adds an extra £33 to the average household's monthly direct debit payment this winter – hitting customers' bills just before Christmas.

From next month the supplier is also increasing its variable prices by an average 7%, following similar announcements in June and September.

The price rise hits Outfox the Market's variable Zapp tariff – currently one of the cheapest energy deals for a typical dual-fuel household. The average bill will rise to £987/year, an increase of £64/yr on current prices and £180/yr compared to the start of 2018. It doesn't have exit fees on variable tariffs though, so if you're unhappy with the changes you can leave penalty-free at any time.

Our Big Switch 12 is now on – to see if you can save by switching do a full market comparison on our free Cheap Energy Club.

'I think this is unacceptable'

Customers have taken to social media to voice their concerns over the changes:

@MartinSLewis 'Outfox the Market' new summer/winter Direct Debit structure. Gone from £115.99 to £202.28 pm. Is this legal... I can't manage that jump 😔😔

It’s even worse than I thought. I only joined outfox this month on £72/mnth. Price increase put that up to £80. Their new billing system would charge £127 for 6 months starting with my next payment. Really not funny.

I accept variable tariffs change. I understand that. A price increase is no reason to not spread the yearly cost equally across 12 months. Outfox new monthly payments based on an average user on £78 mnth are Oct to Mar £109 and Apr to Sep £47. I think this is unacceptable.

How are direct debit payments changing?

Typically, when suppliers set monthly direct debits, they take your estimated annual usage, work out how much you'll pay on your tariff over the year, and divide this by 12 to get your monthly payment. So essentially you overpay in summer, when your usage is low, building up a credit surplus for when you start to use more energy in the cold winter months.

But from next month, Outfox the Market will instead charge 70% of your annual cost in six payments between October and March, and 30% between April and September.

For example, a typical user paying an average £987/year on the supplier's new rates would see the following change to their payments:

Current monthly payment: £82.25 per month. This is calculated by dividing £987 by 12.

New winter payment: £115.15 per month from October to March.

New summer payment: £49.35 per month from April to September.

As the changes are coming in for most next month, Outfox the Market will work out your payments over the next 12 months – from December 2018 to December 2019 – so you'll pay the higher rate until March, the lower rate between April and September, and then the higher rate from October.

Some other smaller suppliers also charge higher monthly direct debits during winter, though usually only if you join them during this season – it is rare for suppliers to alter winter direct debits for existing customers who may have built up credit in the summer.

How are rates going up?

Around 50,000 existing Outfox the Market customers on the Zapp tariff will see prices rise by a typical £64/year from Thursday 13 December, while new customers signing up from today will also pay the new, higher rates.

The increase will also affect the supplier's Whamm tariff, which is essentially the same deal but for higher electricity users (8,000 kWh/year plus).

How to challenge the direct debit hike

You're free to challenge the direct debit increase. Suppliers are required by the regulator Ofgem to set "fair and reasonable" direct debits – see our Energy Direct Debits guide for more.

Outfox the Market says if customers believe their new direct debit amount is too high, they can contact it, and it will use a recent meter reading plus your estimated annual consumption to review it. It also says if a customer has enough credit to cover expected winter bills, they can get a refund and direct debit reduction.

Still unhappy? Most can ditch and switch penalty-free

Most Outfox the Market customers are on variable tariffs with no exit fees. So if you're unhappy with the changes, you can do a full comparison on Cheap Energy Club to see if you can find a better deal - and if so, switch away penalty-free.

However it's worth bearing in mind that even after the changes, your rate may be decent - despite the increases, the Zapp tariff is still among the top five cheapest deals based on typical use.

If you're one of the small number of Outfox the Market customers on a fixed deal, your tariff includes a £50 per fuel exit fee. So unfortunately you can't simply ditch and switch for free.

Remember though that if you're in the last 49 days of your fix, you can leave penalty-free anyway – under Ofgem rules exit fees can't be charged.

What does Outfox the Market say?

Outfox the Market chief executive Keith Bastian said: "Outfox the Market has made a real and positive difference to the energy market. We have helped thousands of customers save large amounts on their energy costs by providing some of the cheapest unit prices in the UK.

"To continue to do this we need to ensure fairness for all of our customers with our billing system. Introducing a winter uplift means customers payments simply match their consumption. Payments will drop significantly throughout the summer months to reflect lower usage and overall, we remain one of the best priced suppliers in the country.

"Introducing these changes promotes a philosophy of fairness, and avoids customers who are in credit funding other customers who are not paying enough for their energy."

Get Our Free Money Tips Email!

For all the latest deals, guides and loopholes - join the 12m who get it. Don't miss out

Have your say

This is an open discussion; anyone can post. Comments may be edited and are only published during the working day. Please report any spam or illegal, offensive, racist or libellous posts (incl username) to fbteam@moneysavingexpert.com.

How this site works

We think it's important you understand the strengths and limitations of the site. We're a journalistic website and aim to provide the best MoneySaving guides, tips, tools and techniques, but can't guarantee to be perfect, so do note you use the information at your own risk and we can't accept liability if things go wrong.

This info does not constitute financial advice, always do your own research on top to ensure it's right for your specific circumstances and remember we focus on rates not service.

We don't as a general policy investigate the solvency of companies mentioned (how likely they are to go bust), but there is a risk any company can struggle and it's rarely made public until it's too late (see the Section 75 guide for protection tips).

Do note, while we always aim to give you accurate product info at the point of publication, unfortunately price and terms of products and deals can always be changed by the provider afterwards, so double check first.

We often link to other websites, but we can't be responsible for their content.

Always remember anyone can post on the MSE forums, so it can be very different from our opinion.

MoneySavingExpert.com is part of the MoneySupermarket Group, but is entirely editorially independent. Its stance of putting consumers first is protected and enshrined in the legally-binding MSE Editorial Code.